Salt Lake City’s
new-urbanism epiphany — fervently backed by Mayor Ralph Becker and the
City Council — appears to be catching static from an unlikely source.

Transit-oriented development isn’t stymied by outdated zoning,
unwilling developers or a lack of space. It turns out, banks, wedded to
old-fashioned lending standards that stress parking, may pose the
biggest blockade by denying financing.

The reason: Lenders operate from a tried-and-true principle that
maintains more parking means less risk and a higher return on their
investment. But ditching cars is the whole point of urban developers
looking to create 24-hour live, work and play environments that hug
light-rail hubs.

That’s right, the same sector that got such fantastic returns from the car-dependent suburban fringe isn’t sold on the viability of neighborhoods where you can get around without driving. Salt Lake City banks are hardly the exception. Based on informal conversations I’ve had with people who deal with local lenders and developers, I can tell you that real estate finance in transit-rich New York City is far from enlightened.

The unwillingness of banks to lend in dense places is redlining in another guise.

I find it ironic that critics call walkable communities unaffordable from one side of their mouths, and undesirable or unmarketable from the other. Which is it, guys? Are cities and walkable neighborhoods only for the arugala-eating upper-crust, or only for the frozen hot-dog hoi polloi? Do you look down on me for not owning a car, or, despite earning more than me, consider my lifestyle a bourgeois indulgence? Aren’t high prices a strong signal indicating unmet demand?

I don’t know much about commercial lending, but as far as home mortgages, I know of more than one family that had to work for months to find a bank that would correctly appraise the house they wanted to buy, a prerequisite to getting a loan. The banks were simply incapable of properly assessing “non-standard” real estate. And that was in Brooklyn in the early 90s. The buyers, in retrospect, got an incredible deal on the houses, but their banks initially refused to lend, saying the houses weren’t worth the bargain price that the buyers and sellers had agreed upon! What nonsense.

ALSO ON STREETSBLOG

Gresham, Oregon used to look like your typical suburb. Lots of lawns and lots of parking. When Portland’s MAX light-rail line expanded to Gresham, developers saw an opportunity to bring something different: walkable development. But a downturn in the local real estate market interceded. One developer trying to build a four-story condo project decided that […]

The good news: Demand for parking spaces is down among residents of central Chicago. But here’s the bad news: The city of Chicago still requires lots of parking. That hurts everyone, whether they live in those buildings or not, says Ryan Richter at new Network blog Transport Nexus: At Lakeshore East, a development of mixed […]

Three years ago, the Regional Plan Association held a panel on congestion pricing at its annual conference. The title of the discussion was “Making Cars Pay Their Way.” At the 2011 conference last Friday, a similar panel on curbing traffic took the more generic title, “Strategies to Manage Congestion.” The difference is telling. Instead of […]

We hope you enjoyed part one of our Q&A with Alan Durning. Durning is publishing a series of articles on his blog at the Sightline Institute — where he serves as executive director — about the ways that underpriced parking drives up rents, eats up space, and makes no sense. A reader asked in the […]

Around the Network today, we’ve got some news and analysis from India, Hong Kong and Seattle: India at a Parking Crossroads: India is developing fast, and the character of its cities hangs in the balance. The country’s emerging urban parking policies will determine whether India’s urban areas come to be ruled by cars, or whether […]

According to Congress for New Urbanism President John Norquist, the Salt Lake City area has the fastest growing rail system in America. And as Streetsblog’s Angie Schmitt pointed out last month, “It’s the only city in the country building light rail, bus rapid transit, streetcars and commuter rail at the same time.” Since the late 1990s, SLC […]